SINGAPORE: When the Middle East conflict erupted, oil markets reacted almost instantly – and Singapore motorists felt it within days.
Petrol prices have surged by as much as S$0.40 (US$0.30) a litre in under a week, with some grades now crossing S$4 a litre for the first time in years.
Global oil prices have swung violently in both directions. Brent crude, the international benchmark, climbed above US$119 on Monday (Mar 9) before tumbling below US$90 after US President Donald Trump said the war could end “very soon”.
For drivers already feeling the pinch, it comes down to this: why did prices spike so fast, will they come back down, and how quickly? CNA breaks it down.
How much have pump prices risen?
A week ago, most Singapore drivers were paying S$2.88 per litre for 95-octane fuel.
As of Tuesday, the price per litre has sailed past S$3 – Caltex is charging S$3.35, Shell and Esso S$3.31 and SPC S$3.14. For premium fuel, Shell is charging S$4.05 a litre.
Filling up a Toyota Noah Hybrid – a popular seven-seater family car – now costs about S$155, up from S$140 just weeks ago, said Mr Kenneth Lee, treasurer of the Vehicle Rental Association.
For private-hire drivers, the pain is real. “Paying an extra S$15 every time the driver refuels might not sound like a big deal for day-to-day drivers, but if you are on the road every day, the extra cost piles up very quickly by the end of the month,” Mr Lee said.
What’s actually driving prices up?
The spike is not about oil running out. The problem is getting it out of the region, an analyst said.
“Kuwait has oil, Saudi has oil. But they can’t get their oil out of the region because tankers are not willing to transport the oil for them at this point in time, because of the dangers in the Strait of Hormuz,” said Mr Sim Moh Siong, a commodity strategist at OCBC.
With concerns about shipping risks, insurance premiums have gone up. Financial markets have also priced in further risk before any actual shortage has materialised.
“Much of the recent increase reflects precautionary risk premiums and uncertainty … rather than an actual drop in global oil supply,” said Ms Sheana Yue, senior economist at Oxford Economics.